This document (the "Term Sheet") describes certain terms of your purchase of tokens (the "Wolk Tokens" or "WLK") that will be issued by Wolk, Inc. ("Wolk") in a token generation event ("Token Generation Event"). By submitting a purchase agreement for Wolk Tokens ("Purchase Agreement"), you will agree to be bound by the terms and conditions set forth in this Term Sheet, the Purchase Agreement for the Wolk Tokens, the risk factors associated with the Wolk Tokens ("Risk Factors"), and/or any other offering materials provided to you with respect to the Tokens, including, but not limited to, the white paper describing the Tokens and Token Generation Event (available here) (collectively, the "Offering Materials"). You are solely responsible for familiarizing yourself with the information and terms provided in the Offering Materials, including without limitation the Risk Factors associated with a Token purchase.

What U.S. Securities law issues apply to the Wolk Tokens?

The Tokens are being offered in reliance upon exemptions from the registration requirements of the U.S. Securities Act of 1933 ("Securities Act"). As a result, there are substantial restrictions on the transferability of the Tokens, and there will initially be no public market for the Tokens for U.S. Purchasers. Unless the Tokens are used in a commercial transaction using the Wolk services, as discussed below, the Tokens may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements. In particular, outside a commercial transaction using Wolk services, the Tokens may not be transferred within the United States or to a "U.S. person" unless such transfer is made to an "accredited investor" in compliance with applicable law, and may only be transferred in a transaction outside the United States to non-U.S. persons, unless and until Wolk reasonably determines and notifies holders that the Wolk Tokens are not securities and freely tradeable. Any transfer made in violation of these restrictions will be void.

What is the purpose of this Term Sheet?

Wolk supports and implements the development of databases for decentralized NoSQL and content/data marketplaces based on Ethereum SWARM. Wolk Inc. is sponsoring an issuance and release of Wolk tokens ("Wolk Tokens" or "WLK") and the "Token Generation Event" that will allow holders to store and retrieve content and data data using WLK. This term sheet ("Term Sheet") provides additional background on the Wolk Tokens, the Wolk services and the Token Generation Event.

Background

What are "Wolk Tokens"?

Wolk Tokens are a form of cryptoasset, or virtual currency, that can be used for certain functions related to purchasing and selling content and data through the services sponsored and operated by Wolk. Additional details on Wolk Tokens and the system sponsored by Wolk can be found below.

What is "Wolk"?

Wolk Inc. is a for-profit Delaware corporation that develops decentralized database services for next generation decentralized applications. More detailed information on Wolk is available at wolk.com.

What is the "Token Generation Event"?

The Token Generation Event is an opportunity to buy Wolk tokens (WLK) that will be issued by Wolk Inc. The Wolk Token Generation Event starts October 15, 2017. More details are provided below under "The Token Generation Event."

Who is issuing and managing Wolk Tokens and sponsoring the Wolk Token Generation Event?

Wolk Inc. is issuing Wolk tokens (WLK) and sponsoring the Wolk Token Generation Event. U.S. and non-U.S. purchasers who buy Wolk Tokens through the Wolk web site and send ETH to the Wolk token contract will purchase Wolk Tokens issued by Wolk Inc.

The Wolk Tokens

What can I do with Wolk tokens?

Holders of Wolk tokens may store and retrieve content and data held in Wolk's SWARMDB.

When can I use my Wolk Tokens?

It is anticipated that Wolk tokens holders will be able to use their Wolk tokens starting early 2018.

Can I do anything else with Wolk Tokens?

Wolk is designing Wolk tokens for use in decentralized content and data storage based on Ethereum SWARM at present but may develop alternate storage methods in the future. There is no guarantee, however, that any other uses of Wolk tokens will develop.

Do Wolk tokens have any relationship to Ethereum or other blockchain systems?

Yes. Wolk tokens are used for Wolk's Ethereum SWARM database services. Wolk tokens are built on the Ethereum blockchain system, using the ERC20 standard as the backbone for many of its functions. ERC20 is a standardized mechanism for exchanges and other forms of smart contracts.

How many Wolk tokens are initially available?

Wolk will sell up to 17,500,000 Wolk Tokens, which combined with 50,000,000 Wolk Tokens allocated to Wolk Inc, implies that there may be up to 67,500,000 Wolk Tokens immediately after the finalization of the token sale. The exact number of Wolk tokens issued and distributed during the Token Generation Event will be determined by the amount of ETH sent into the Wolk Token Contract during the token sale.

How much does each Wolk Token (symbol "WLK") cost during the token sale?

Each Wolk token (WLK) will priced betwen .0005 and .001 Ethereum, based on the total number of tokens issued so far at the time a purchaser sends Ethereum into the Wolk Token Contract. In other words, one Ethereum can purchase between 1000 WLK and 2000 WLK. The current price of Ethereum can be found here.

Will the supply of Wolk tokens ever decrease?

Yes. Each time the sellWolk function is used in the Wolk Token Contract, tokens are "burnt" and ETH is returned to the caller.

Will my Wolk tokens (WLK) increase in value?

We anticipate that Wolk tokens (WLK) may grow in value based on increasing demand for paid commercial grade Ethereum SWARM database services. However, there can be no guarantee that Wolk tokens will hold its value or increase in value. Many factors will influence this outcome, some of which are described below under "What risks are involved in Wolk tokens?"

Does holding WLK give me other rights, such as profit rights, governance rights, or others?

No. Holding a Wolk token (WLK) does not give holders the rights to any of the profits or revenue of Wolk Inc. or any buyer or seller using the Wolk system. Holders also do not have any right to vote on any aspect of how the Wolk system (or any buyer or seller) is governed.

Will the characteristics of Wolk tokens ever change?

Wolk anticipates that in the future, it may adapt Wolk tokens to additional storage, content and data services. Wolk does not anticipate adding this utility in the near future however.

How will Wolk use proceeds of the Token Generation Event?

Wolk will use the proceeds (net of federal and state taxes) for the following purposes:

5% supports liquidity of Wolk tokens directly via purchaseWolk and sellWolk functions in the token contract, which increases and decreases a reserve created for this purpose programmatically

75% will support Wolk Inc.’s engineering, marketing, business development and other operations

20% will support a "Wolk Ecosystem Development Fund," which will support content+data supplier onboarding by Wolk Inc.

Will additional WLK be available for purchase in the future?

Although Wolk may sponsor future Token Generation Events, none are currently scheduled.

What is Wolk’s purpose in issuing Wolk tokens?

Wolk Tokens are integral to Wolk's Ethereum SWARM database services. (More about this system is available on this website.) In short, WLK is used for the following:

Incentivize storage and bandwidth providers to provide their excess storage and bandwidth to run SWARM clients for the purposes of supporting storage/ content / data marketplaces.

October 15, 2017 through October 31, 2017 or when the maximum number of Wolk tokens (17,500,000 WLK) is sold.

Who can purchase Wolk tokens in the Token Generation Event?

In general, anyone holding Ether in an Ethereum wallet, subject to certain restrictions. U.S. purchasers must be accredited investors as defined under the Securities Act. Wolk reserves the right to restrict purchases to residents of certain US states, and currently residents of New York are not permitted to purchase Wolk tokens.

Non-US participants may purchase Wolk tokens subject to Wolk's determination that the purchase complies with applicable law in their local jurisdictions. Note that Wolk may be required to use Know Your Customer ("KYC") practices for participation and may use third party services for these practices.

Does Wolk recommend that I purchase Wolk tokens?

No. Each potential purchaser should carefully review the Offering Materials for Wolk Tokens to determine whether the Tokens are appropriate purchases for that individual.

Before you purchase Wolk through the Wolk website, you will need to hold Ethereum in an Ethereum wallet. Other cryptocurrencies will need to be exchanged for Ethereum to obtain Wolk tokens. Individuals who purchase Wolk will be required to execute a purchase agreement and will send their request to a "Wolk Token Contract Address," which is published on wolk.com.

How will Wolk tokens (WLK) be delivered to me?

Wolk tokens (WLK) will be delivered to the Ethereum address that you used to participate in the Token Generation Event. Your total holding of WLK can be verified publicly on the Ethereum blockchain, by using services such as Etherscan.io, and with many Ethereum Wallets (Myetherwallet, imToken, Mist, etc.).

Is there a minimum purchase of Wolk tokens?

No.

If I submit a purchase agreement for Wolk tokens, is it guaranteed that I will purchase Wolk tokens?

No. Wolk reserves the right to reject any purchase of Tokens at its sole discretion, and your purchase is only complete when you send ETH to the Wolk Token contract.

Will I be charged any fees when I purchase Wolk tokens?

Yes. As with any transaction in Ethereum, you will incur a transaction fee determined by the gas used and a gas price you specify to conduct the transaction using Ethereum. This fee will be paid to miners on the Ethereum system. Wolk does not pay or receive any fees based on your purchase of Wolk tokens.

Holding and Using Wolk tokens

How will I keep track of how many WLK I own and how much they are worth?

Your Ethereum wallet can be used to keep track of your WLK balance. The wolk.com website will display the Ethereum to WLK exchange rate internal to the smart contract.

Will I receive reports on my Wolk tokens?

No. However, token balances can be checked on the public blockchain as described above.

How do I use Wolk Tokens to purchase content and data?

Content and data buyers will use the Wolk’s open source SWARM clients to purchase content and data with WLK using the SWARM client as described in the White paper.

Will I be charged any fees when I use WLK?

Yes, when you use sellWolk or purchaseWolk to buy or sell Wolk tokens in exchange for ETH, you will be charged gas costs to execute the transaction.

Additional Acquisitions and Liquidity of Wolk Tokens

Can I acquire additional Wolk tokens (WLK) through the Wolk systems outside the Token Generation Event?

Yes. Wolk tokens may be acquired in three ways:

Selling Content and Data. After the Token Generation Event, sellers of content and data may use SWARM clients to earn Wolk tokens (WLK) using the process described here.

Exchanging Ethereum. Ethereum (ETH) can be exchanged for Wolk token (WLK) by sending Ethereum to the Wolk Token Contract Address and using Wolk’s purchaseWolk function, as described more fully here. This functionality is made possible by Wolk maintaining an Ethereum reserve representing 5% of the total value of WLK held by token sale contributors. The Wolk Token smart contracts automatically adjust the exchange rate between Ethereum and WLK on an ongoing basis to allow liquidity while maintaining this reserve.

Providing Storage and Bandwidth. Anyone using Wolk's SWARM client can provide storage and bandwidth to Wolk's SWARM network. When chunks of data are returned, WLK is earned.

Will Wolk exchange my Wolk tokens (WLK)?

Yes. Holders of WLK can exchange WLK for Ethereum through the Wolk token contract, based on Wolk’s Ethereum reserve representing 5% of the total value of existing Wolk tokens held by purchasers of Wolk tokens. As indicated above, the Wolk Token contract automatically adjusts the exchange rate between Ethereum and WLK on an ongoing basis to allow liquidity while maintaining this reserve. Exchanges are always possible so long as there is Token supply. In addition, WLK may be freely transferable to other holders after the Token Generation Event. Subject to certain important transfer restrictions described below under “Are there restrictions on my ability to transfer my Wolk?”, a holder can sell WLK to buyers who require WLK to buy data and to suppliers and to cryptocurrency speculators, among others. All such transactions are verifiable and secured on the public Ethereum blockchain.

Who receives any Wolk tokens I exchange for Ethereum through the Wolk system?

Any Wolk tokens you exchange via the sellWolk function will be removed from the token supply and destroyed.

Can I exchange Wolk tokens for other currencies?

It is possible that third-party currency exchanges and/or cryptocurrency wallets will, in the future, allow users to exchange WLK to and from other currencies, subject to certain important transfer restrictions described below under “Are there restrictions on my ability to transfer my Wolk?”. There can be no guarantee, however, that any such mechanisms will develop.

Are there any restrictions on my ability to transfer my Wolk tokens?

Yes. The Wolk Tokens are being offered in the U.S. in reliance upon exemptions from registration under the Securities Act. Therefore, unless the Tokens are used in a commercial transaction involving Wolk services, WLK may not be transferred within the United States or to a “U.S. person” unless such transfer is made to an “accredited investor,” in compliance with applicable securities laws, and may only be transferred in a transaction outside the United States to non-U.S. persons, unless and until Wolk reasonably determines and notifies holders that the WolkTokens are not securities and freely tradeable. Any transfer made in violation of these provisions will be void.

When Wolk Tokens are used for Wolk database services, Wolk believes it is reasonable to treat the Tokens as non-securities for purposes of U.S. law. In addition, based on anticipated use of the Wolk tokens, Wolk believes that over time, all the Tokens will reasonably be treated as non-securities for purposes of U.S. law, at which point Wolk will notify holders of the finding and that the Wolk Tokens are freely tradeable. There is no guarantee that this will occur. For more on the regulatory status of Wolk Tokens, see the discussion under “Are Wolk Tokens registered with any state or federal regulators?”

Other Issues

Are Wolk Tokens registered with any state or federal regulators?

No. Wolk believes that because the Wolk tokens are designed to be used for commercial transactions using the Wolk services, the Wolk tokensare not securities, futures, swaps, or any similar type of instrument for purposes of U.S. law. However, because a U.S. regulator could disagree with that assessment, Wolk is treating the Wolk tokens purchased in the Token Generation Event as securities for purposes of the Token Generation Event with respect to U.S. investors. Therefore, in compliance with the safe harbor for private offerings in the United States under the Securities Act, Wolk is only allowing non-U.S. persons and U.S. persons who are “accredited investors” to purchase the Wolk Tokens in its Token Generation Event. This means that purchasers of Wolk Tokens will not be provided the full set of protections that registration or associated regulations under the Securities Act would otherwise give them.

Based on anticipated use of the Wolk tokens, Wolk believes that over time, all the Tokens will reasonably be treated as non-securities for purposes of U.S. law. In particular, Wolk believes that acceptance of the Wolk services will mean that Wolk tokens are mainly used for commercial transactions using Wolk services, which will cause the Tokens to take on additional characteristics of non-securities. At the point when Wolk believes that this has occurred, it will notify holders of the Wolk Tokens. There is no guarantee that this will occur. In addition, there is no guarantee that a regulator will agree with Wolk's analysis. If a regulator disagrees, Wolk may need to make significant changes with respect to how the Wolk Tokens are structured, how they are purchased and sold, and other issues, which could greatly increase Wolk's costs in operating its business. This development could also lead to the termination of Wolk tokens. Further, a regulator could take action against Wolk if it views Wolk and/or the Wolk tokens as out of compliance with law. Any of these outcomes would negatively affect the value of Wolk tokens.

Are Wolk tokens taxable?

Any returns you receive based on appreciation of Wolk tokens or as a result of transactions on the Wolk system could be taxable. Holders of the coins should discuss these issues with their tax advisers.

Can I use Wolk Tokens on any other platforms?

As discussed above, Wolk is designing Wolk Tokens to initially facilitate its decentralized NoSQL + content/database services powered by Ethereum SWARM. However, third parties could also build systems using Wolk Tokens. There is no guarantee that any third parties will develop alternative uses of Wolk Tokens.

What risks are involved with holding Wolk Tokens?

There is no guarantee that Wolk Tokens will hold their value or increase in value, and you may lose all or some of the money you spend on Wolk Tokens. The value and success of Wolk Tokens depends on the commercial success of Wolk's decentralized database services.

In addition, there is no guarantee that Wolk Inc. will continue indefinitely as a viable company. The utility and value of Wolk tokens depends on Wolk’s success and support of the Wolk ecosystem.

Virtual currency such as WLK is a new and relatively untested product. There is considerable uncertainty about its long-term viability, which could be affected by a variety of factors, including many market-based factors such economic growth, inflation, and others. In addition, the success of WLK and other types of virtual currency will depend on whether blockchain and other new technologies related to WLK turn out to be useful and economically viable. Wolk does not control any of these factors, and therefore may not be able to control the long-term success of WLK as a feature of the Wolk system, or the ability of WLK to maintain their value.

Wolk is selling Wolk tokens in the U.S. under an exemption from registration under the Securities Act, and Wolk will not be registered under any U.S. securities or commodities laws. It is possible that a regulator could disagree with Wolk’s position that it is not required to register under those laws. This could lead to significant changes with respect to how Wolk tokens are structured, how they are purchased and sold, and other issues, and would greatly increase Wolk’s costs in creating and facilitating transactions in Wolk tokens. It could lead to the termination of Wolk Tokens. Further, a regulator could take action against Wolk if it views Wolk and its offering as a violation of existing law. Any of these outcomes would negatively affect the value of Wolk tokens.

The regulatory risks described above take into consideration U.S. law only. It is anticipated that Wolk will also be sold outside the United States, which could subject Wolk or Wolk tokens to non-U.S. legal requirements, which could be significant. Non-U.S. regulation could lead to the same types of changes and outcomes described above with respect to U.S. regulation, and any of these outcomes would negatively affect the value of Wolk tokens. Because Wolk tokens are built on the Ethereum blockchain and ERC20, it is in part dependent on Ethereum’s effectiveness and success, as well as the success of other blockchain and decentralized data storage systems. There is no guarantee that any of these systems or their sponsors will continue to exist or be successful, in which case Wolk would need to modify its APIs to adapt to a new way of providing its services. This could lead to disruptions of the Wolk services and could negatively affect Wolk tokens, its functionality, and its value.